The Role Each Mode of Transportation Plays in the Economies, Demographics, and Politics of the National and International Community
To move a product both between countries and within a country entails three fundamental modes of transportation which include air, water and land. Ocean and air transport is appropriate for transportation between countries particularly when the distance is considerable and the boundaries are not joined. Inland water, rail and highway are more appropriate for inland and domestic transportation. For countries, which are connected by land, such as North America, it is possible to use rail and highway to move merchandise from locations such as the USA to Canada. In other parts of the world railway is an important mode of transport due to the contiguity of land areas and the availability of modern and efficient train systems.
Samanta & Mohanty (2005) noted that in this age of globalized business environment, transport infrastructure and performance is a key factor in attracting foreign direct investment which has become a key factor in developing economies. Transport system is broadly considered as the artery and nerves covering the entire economy of the country (Samanta & Mohanty, 2005). The demand for transport services in America has been growing much faster than the rate of economic growth.
Road transport services as well as railways occupy prominent place in our economy, accounting for approximately 68.4% and 32.4% respectively of the total transport sector. As far as demographics are concerned, the total road length plays an important role in ensuring accessibility (Samanta & Mohanty, 2005). The rail mode of transport has been playing an integrating role in socio-economic development of the country. Samanta & Mohanty (2005) indicated that the railways in United States have been performing the dual role of functioning as a commercial undertaking and a provider of public utility service.
Air transport also plays a vital role in a vast country like America. Samanta & Mohanty (2005) noted that water transport is another important mode of transport, considered to be the cheapest mode of transport. Air transportation system has complex social and economic interrelations; hence there is a need for individuals to perceive its structure and performance.
Air, road and water transportation modes serve political roles. Through these three modes of transport, it should be noted that internally a country seeks good water, air and road transport to permit more effective defense of its borders and to improve the political cohesion of the nation. Externally, the three modes of transport enable the country to dominate any other country. Politically, the ownership of expensive modern transport infrastructure, especially aircraft or mercantile marine, is also treated as a symbol of power and status.
Road and air transport permits social intercourse, and a greater understanding of the problems and attitudes of various geographically distant groups may come with it (Button, 2010). In the United States of America the enhancement of social understanding brought about by increased international travel is well recognized. Air and water transport allows for the staging of international exhibitions, sports, concerts, parades and fairs that stimulate new trends and innovations in the cultural and sporting spheres.
In demographics, Button (2010) says that transport is desired to permit people to live and work apart. Air and water permits the geographical separation of employment from leisure. Button (2010) noted that air transport increases the lifestyle options open to people, giving them a choice among residential locations away from cities but involving a heavy commitment to travel.
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Analyze and Compare the Development of Each Mode of Transportation
Railroads borrowed and learned from previous experiences, especially road and canal building and operations. The relations between rail and road and canal experiences had influence on the development of railroad mode of transportation. Garrison & Levinson (2006) indicated that with only minor modifications, railroads copied the precursor experiences embedded in English railroads. They further noted that policies for roads and canals were augmented and revised to enable railroad construction and operations. Railroads have achieved improvements over the years by tailoring investments and services to markets and reconfiguring services to eliminate dysfunctional activities.
Within the 20th century, railroads lost passenger traffic to autos, buses and air services. Loss to the highway modes began in the 1930s, especially in short-distance markets. Garrison & Levinson (2006) says that high-speed rail was touted as the only way to reinvigorate rail demand by reinventing the technology. It is important to note that although rail construction continued into the 20th century, the fabric of rail networks was much deployed in the United States and Western Europe by the last third of the 19th century.
Road transport began with for-hire horse-drawn passenger services, which were referred to as omnibus. The services that urban mass transit could offer were greatly improved when rail technology entered the city. Garrison & Levinson (2006) noted that in the late 19th century, road transport was regarded as highly desirable from a social point of view. Problems became acute by the 1910s and the 1920s when cars and trucks started providing competitive services and there were also other factors that affected the transit market. In many cities there were several transit properties operating as competing services; hence they were not often coordinated. Since the transit properties operated on franchises, matters of fares and service had often been politicized (Garrison & Levinson, 2006).
The use of road transport offered increased performance and, eventually, lower costs compared to animal propulsions systems. Garrison & Levinson (2006) indicated that pressure to improve the rural road system intensified after 1900 as farmers began to purchase and use automobiles and trucks. Garrison & Levinson (2006) say that roads were popular and the popularity of road improvements was pushed by the need to get farm products to railheads and by use of bicycles. The primary reason of establishing roads was for long distance travel and other additional needs such as social, economic and national defense.
The American shipbuilding industry developed early. The American shipbuilding advantage was strained in the 1830s when the British began to use their advantages in propulsion power know-how and iron and then steel production to build large, fast steamships. Garrison & Levinson (2006) mentioned that the British also started a mail contract program in 1839, a program emulated by the United States in 1845. The United States Civil War destroyed the fleet and by the 1870s the country had little presence in maritime trade. After the war the industry gathered momentum and it was reestablished again. As ships grew so did the ports. It is important to understand that sea and land transportation surged with the beginnings of modern commerce and industry and the need for port facilities followed.
Air transport development began to evolve in the 1920s in the over water market niches. Garrison & Levinson (2006) say that the important actors were Pan American Airlines and producers of flying boats. Garrison & Levinson (2006) further say that commercially viable planes were produced, firm organizations and passenger interrelations were worked out, and there was important development of en-route control system. Overland commercial systems began to evolve in the 1920s, but their birth is best marked at about 1935 with the development of the DC-3 suitable aircraft. The first uses of the system were for airmail communications and the air travel substitution for ship and rail travel. The increased internationalization of air travel after World War II drove an international policy agenda beginning in the late 1940s (Garrison & Levinson, 2006).
Compare and Evaluate the Historical Development, Characteristics, and Current Issues Concerning Air, Highway, Sea, Rail, and Urban Transportation.
The development of air transport began in 1920, although its birth is best marked in 1935. The evolution of aircraft included more than the equipments. This is because aids to en-route navigation evolved during the 1930s when there was the development of the AM radio range suitable for voice communication, tower and en-route traffic control. Garrison & Levinson (2006) noted that heavy government involvement in the 1930s saw the development of the precursor to the Federation Aviation Administration (FAA) and government regulation following the rail model. Unlike the rail, highway and sea transport, air transport model was the latest to join the transportation industry. Successful jet engine, commercial jet aircraft came on the market in about 1960 (Garrison & Levinson, 2006). The trend in air transport has been towards steadily higher speeds. Air and highway transport models are compared across a number of aspects. For air there are commercial and private aviation systems and freight versus passenger modes. Garrison & Levinson (2006) argue that the birth of rail set a new form to fit the function and growth of new rail transit system.
The history of sea transport dates back in 1660, when navigation laws restricted all colonial trade to English ships. Garrison & Levinson (2006) study that the United States had all necessary resources and labor skilled in ship construction. In 1789 the Congress gave a 10% tariff advantage to goods hauled in American bottoms. Later, the 1817Act invented cabotage restrictions to ensure control of coastal trade. In 1828, the United States passed a reciprocity act to deal one-on-one with other nation’s trade restrictions.
In the 1870s the United States Civil War destroyed the ships; hence the country had little presence in maritime trade (Garrison & Levinson, 2006). World War I created a crisis and the Shipping Act of 1916 established a Shipping Board, which was authorized to construct and operate ships. The adoption of sensors, communications and computers in the 20th century along with containerization has yielded sharp reductions in the labor required as well as advances in ship routing and scheduling (Garrison & Levinson, 2006).
In the last four decades the United States and other countries in, Europe and Asia have witnessed that growing ports increased capacity, whereby companies and local governments provided financing and exerted control, subject to enabling actions by central governments and to customs control and other operational matters of interest to central government. The 1970s saw the emergence of better fuel efficiency though continued improvements in engine, ship, and propeller and rudder designs. There was a further development of hub ports, such as Singapore and Rotterdam, in order to gain economies of scale in shipping (Garrison & Levinson, 2006).
Nowadays mature urban transport system is large and intertwined in most facets of American life. Garrison & Levinson (2006) indicated that unlike rail transport, which was developed as a means of bulk transport, it was noted that the rapid growth of cities in the beginning of the1800s accelerated the provision of urban roads. Garrison & Levinson (2006) explained that though there was much progress there were critical issues: urban transport and railroad conflicts. Urban growth resumed in the late 1940s and the 1950s and big cities had ambitions, institutions and plans but little money. Garrison & Levinson (2006) further mentioned that until 1950 there was no political support for federal and state expenditures in cities, especially related to highways and many other programs.
The current realization of the truck-highway system dates back to 1910.With the growth of motor vehicle use and the importance of the high network, the role of the federal government expanded. By 1935, the industry was sizeable and growing in spite of the Great Depression. Competition claimed to be threatening the stability of the industry. Unlike railroads, which were no longer growing, trucking companies wished to be protected from new entries. Rail transport, on the other hand, was the first of the modern modes of transport. Garrison & Levinson (2006) indicated the problems that the railroads had to cope with; besides they mention those planners and policymakers who strived to bend the transport modes according to their wills, while the rail tried to arrange passenger service provision by a coach operator and freight services.
The Role of State as well as Federal Governments, Politics, and Economic Realities Involved in the Maintenance and Regulation of Each Mode of Transportation.
In the United States, the 1970s entailed activities that accelerated abandonment of low density routes and elimination of failed railways. Garrison & Levinson (2006) noted that the railroad administration began to identify lines they could be abandoned and those they might be abandoned in the future. The Congress instructed the Federal Railroad Administration (FRA) to develop a procedure and fund state railroads` planning activities. While the rail regulatory act clearly collapsed during the World War 1, the regulation initiatives of the late 19th and early 20th centuries worked for their times. The federal government served as a referee for ratemaking disputes among rail companies and therefore began to assert the power over who gets the location transportation rents.
During most of the 20th century, the United States railroads lost passenger traffic to buses and air services. Loss to the highway modes started in the 1930s, especially in short distance markets. Rail revenues from the operation of alternative modes of transportation were estimated and then compared to the avoidable cost of continued service. In 1900 there was pressure from the farmers to the Federal Government to improve road networks. The necessary governmental institutions were in place and technology was available.
The 1921 Act concentrated resources and triggered the establishment of the State Highways Department. The ABC system was established which enabled classification of state highways eligible for federal funding. Garrison & Levinson (2006) noted that the United States in 1956 established the Federal Highway Aid Act and the Highway Revenue Act. These acts authorized $31.5 billion in federal and state aid to build the interstate highway systems. Politics played a major role against the plans to finance the highways with bonds to be repaid with tolls and was able to get enacted pay-as-you-go taxes on fuel, tires and trucks.
In the road transportation, the government has played a fundamental role in ensuring highway policy, automobile, safety, congestion and truck weight policy. The power of the federal government to withhold funds tax monies it had collected from road was not settled by court up to the 1970s; hence it was an unsettled question that had made the Bureau to go slow in requiring planning (Garrison & Levinson, 2006).
Button (2010) indicated that the federal government has heavily regulated air, rail, sea, and road transport. The regulatory structures are broken down into economic regulations and social regulations. The former in the United States is used to deal with more conventional market failures, such as monopoly power or excessive competition, whereas social regulations focus on environmental protection and safety (Button, 2010).
In the United States roads are largely publicly owned by the federal and state governments as are sea and airport and the air traffic control systems. The aim of this is to ensure that the state can directly control the prices customers pay, the level of capacity and the types of services that are offered. Button (2010) indicated that in the United States there has been a trend known as deregulation, which involves a combination of privatization, albeit with some other less direct controls often replacing it, and less rigid price, capacity and entry controls.
The Impact that Technology has on the Transportation Industry and the Methods Used by Each Mode to Improve Profits and Performance.
The sea transport saw the adoption of various technologies such adoption of sensors, communications, and computers along with containerization, which has yielded sharp reductions in labor required as well as advances in ship routing and scheduling. To improve performance in sea transport the regulatory authorities should ensure that there is simultaneous loading of multiple containers to speed up port turnaround. Bidgoli (2010) noted that rail transport is very important in the United States.
Recent technological advances may enable the relatively leisurely speed of ships to be increased by new propulsion systems and new hull designs. Although new technology may produce increased speed and carrying capacity, it is unlikely that future enhancement of capabilities will be sufficient to alter the current balance between sea and other modes used in transportation. The improvement in technology is likely to improve profits because of cost reductions associated with fast movement of ships and boats in sea transport.
The rail transport requires heavy investment in technology in such areas as investment in tracks, signaling technologies, terminal facilities and equipments. To improve profits, the rail transport should reduce fixed costs and increase the unit cost of transport when transport volumes are low. The rail transport decrease costs slowly as rail transport volumes increase (Bidgoli, 2010).
Rail transport in the United States is regarded as the least cost choice for large quantities of goods transported over long distances. Sharma (2005) noted that the introduction of new technologies in rail transport has allowed it to recapture some passenger traffic from road and air transport. The development of Very Fast Trains (VFT) has enabled rail to compete with other modes on the basis of speed, comfort, safety and price. In future it is projected that maglev technology may replace current electrically powered Very Fast Trains and, in some instance, road and air transport.
In the air transport, the introduction of long range jet passenger and cargo aircrafts has made mass intercontinental travel possible. The introduction of new technologies in air transport has caused air fares to fall, while safety and comfort levels have risen. Sharma (2005) indicated that the main factor likely to determine the technology to be adopted is the operating costs. Technologically, a new generation of supersonic transport (SST) aircraft is feasible and a number of designs have been proposed in recent decades. The industry can improve its profits by cutting its operational costs, such fuel consumptions, and reducing tax credits imposed by regulatory authorities.
Road transport relies on automobiles to move people and goods from one place to another. Sharma (2005) noted that “in the near future it is expected that a number of new technologies may be incorporated into vehicles design to reduce reliance on fossil fuels and improve efficiency” (p. 91). The introduction of high speed roads, new automotive technologies and advanced computer-assisted traffic management will have significant implications in this mode of transport. New engine technology, improved car design and automated highways will lead to the fight by automobile manufacturers to retain their current supremacy (Sharma, 2005). Profits in road transport can be improved by reducing congestion, improving the sources of energy, such as the use of fuel cell and electric cars.
How and Why National and International Transportation Policy, Rules, Methods and Procedures are Developed and Applied
Thefederal government has played an important role in modeling the transportation policy that exists in the United States. Coyle et al (2010) say that the federal government’s role has been defined through various laws, rules and funding programs, directed toward protecting and promoting different modes of transportation. The Congress and the President of more than 60 federal agencies and 30 congressional committees are involved in setting transportation policy. Independent regulatory agencies interpret transportation law, establish operating rules and set policy. Coyle et al (2010) further say that “the Justice Department interprets statutes involving transportation and reconciles differences between carriers and the public” (p. 66).
The purpose of the transportation policy is to provide direction for determining the amount of national resources that will be dedicated to transportation and for determining the quality of service that is essential for economic activity and national defense. Coyle et al (2010) also indicated that the federal government has been a major factor in the development of transportation facilities such as highways, waterways, ports and airports. The policy ensures the safety of travelers, protects the public from the abuse of monopoly power and finally the policy promotes fair competition. The international transportation policy encourages and promotes energy conservation and provides for the expeditious handling and resolution of all proceedings, required or permitted to be brought to this part.
The United States Department of Transportation (U.S. DOT) was created in 1967. This body manages policy, overall administration and international affairs. The national transportation policy is developed by the executive branch, such as the Federal Maritime Commission, Department of Energy, Department of Housing and Urban Development (HUD). The Department of State is directly involved in developing policy regarding international transportation by air and water.
The Federal Maritime Commission is charged with determining the ship requirements, service and routes essential to foreign commerce (Coyle et al, 2010). The congressional committee helps in formulating laws to influence national transportation. The committee develops policies, programs and funding for transportation. Within the Congress the two committees that influence transportation are Committee on Commerce, Science and Transportation and Committee on Environment and Public Works (Coyle et al, 2010). Regulatory agencies, such as SBT and FMC, are occupied with implementing the laws regulating transportation.
Just as national government policies may be geared to intervene directly in international transport, so, in some instances, the lack of effective or coordinated action may equally lead to impediments in the efficiency of the market. Platzöder & Verlaan (1996) indicated that the 1992 Treaty on European Union stipulates a series of principles on common policies and activities. Rail, road, air and sea transport and internal waterways are considered sectors of transportation, which in international political, economic and environmental terms are part of one transportation system. International transport policies, such as those formulated by the European Union, may adversely affect non-members. For example, the International Maritime Organization should have a role in planning bridges across international straits by developing appropriate procedures (Platzöder & Verlaan, 1996).
How Organizations Operate as Systems that Perform the Core Function of Moving People and Goods through Transportation Networks.
Organizations operate as systems that are embedded in geographic, economic, social and political environments, corralled by the limits of technological structure and the nature of specific modes. Garrison & Levinson (2006) indicated that organizations are collated with transportation experience to give rise to perceptions, principles and attitudes. Those layers in organizations generate a layer of policies that is translated into actions. Garrison & Levinson (2006) indicated that action and reaction indicate the modes adjust performance to cope with problems, which, in turn, shape and reshape the organizations` capacity to move goods from one place to another.
Organizations operate as systems, in which they permit the development of economic resources to the full. Branch (2006) indicated that organizations with low cost reliable and well managed transport systems, goods or services would not be exchanged. Organizations embrace the supply chain in a logistic driven international trade movement to perform the core function of moving people and goods through transportation networks (Branch, 2006). Operating as systems, organizations today have an efficient professionally managed global transport network, which is the prime stimulant to the continuous expansion of world trade (Branch, 2006). This implies that organizations will not move goods, unless a good transport infrastructure exists. Organizations operate as systems that perform the core function of moving people and goods through transportation networks, because they have a strong interface with each other to generate efficiency and facilitate trade development.
The Political, Legal, and Policy Issues Concerned with the Planning and Development of New or Improved Transportation Systems
The domestic laws of one country are evident in the case of international transportation. Holmes (2007) noted that with respect to residence, a country may claim to tax all the profits of a shipping company because the company is registered or incorporated there, while another country may seek to do the same because, for example, the head office of the shipping company is located within its jurisdiction. Holmes (2007) further says that in relation to an airline’s profits, one country may claim that it is the source of the income, because in terms of domestic law, it is the country, in which the airline passengers embarked the aircraft. At the same time, another country may claim that it is the country of source because the airline tickets, which produced the income, were sold in that country.
Holmes (2007) noted that these political, legal and policy issues can be overcome by prescribing that the country, in which the international transport enterprise has its place of effective management, is the country that has the right to apply a tax on the profits generated from those operations. Article 8 (Shipping, Inland Waterways Transport and Air Transport) states that profits from the operations of boats or aircrafts in international traffic shall be taxable only in the contracting state, in which the place of effective management of the enterprise is situated. Holmes (2007) noted that legal and political issues indicate that the tax policy objective obtained in connection with air and sea transportation operations in international traffic should be subject to taxation in one undisputed state.
It should be noted that since many international transport undertakings are not carried out by one transporter alone, but through mutual arrangements between two or more transporters, the profits of an operator should be extended to include shared profits from the participation in a pool, a joint business or an international operating agency (Holmes, 2007).
Considering that the transportation sector has many inter-linkages with other actors, the legal, political, policy issues, social and economic co-benefits should be identified, so that improvements for the wider economy are compatible with the long-term objectives. Holmes (2007) indicated that the analysis of these policies ensures that it is easy to mobilize investment in transport logistics infrastructure at the national level, given the impacts on economic competitiveness of a country as a whole.
The Role and Importance of Intermodal Transportation within the Transportation Industry
Intermodal transportationis the use of combinations of various transportation modes. Wisner, Tan & Leong (2008) noted that intermodal transportation is becoming an extremely popular transportation arrangement and makes the movement of goods much more convenient and efficient. Many large logistics services companies today offer one stop door-to-door shipping capabilities, transporting goods for one price; they determine the best intermodal transportation and warehousing arrangements to meet customer`s requirements as cheaply as possible (Wisner, Tan & Leong, 2008).
Intermodal transportation combines the advantages of rail and truck transportation. Intermodal transportation involves the use of at least two different modes in a trip from origin to destination under a single transport rate. Rodrigue (2009) says that intermodal transportation enhances the economic performance of a transport chain by using the modes in the most productive manner. In this context, the line-haul economies of rail may be exploited for long distances with the efficiencies of trucks, providing local pickup and delivery (Rodrigue, 2009). The emergence of intermodal transportation has been brought about by technology. In intermodal transportation, shipping lines are able to offer integrated rail and road services to customers.
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